Markets tumble after Home Depot and Walmart brace for consumer slowdown

Wall Street has suffered its worst day of 2023 with red across the board. The Dow, the S&P, the Nasdaq all down more than 2%. Why? In large part, it's because of alarm bells from two of the country's biggest retail stores. Walmart is warning it might be in for a rough year, worried that inflation is going to take a big bite out of consumer spending. Home Depot is saying the same after posting week fourth quarter numbers and that sent the stock tumbling down 6% today. CNBC is Ron Insana. My old colleague joins me now.

Ron, those Home Depot numbers are concerned because the store is kind of seen as a bellwether, right? For the broader economy, and we have this new report showing weaker home sales as well. Yeah, to the extent, Tom, that consumers are focused more on buying basic necessities, groceries, and the like, and inflation is cutting into their income to do that. We also have concerns that inflation is going to remain sticky, and that's that interest rates up sharply, which put a lot of downward pressure on the stock market. As you said, worst day of the year, the Dow down nearly 700 points, the Nasdaq down 2.5%. So it was a wrap across the board based on concerns about the consumer, but also on worries that the Federal Reserve will raise interest rates too much and drive us ultimately into a recession. Ron, it seems like today's warning is really a sign that traders believe the Fed will continue hiking rates.

It's already done so eight times. And yet, this unemployment rate remains unbelievably low at a 1960 and line nine low. It's almost a story of two separate economies here. And in a sense, you're right, Tom. I mean, part of the problem that we have in the employment market, the labor market, is we're literally short people. We have 1.9 open jobs for every unemployed American in the U.

S. So we are short laborers. It's not that the economy is growing so fast growing at about a 2.5% clip right now. It's that we're literally short people and no one's certain that higher interest rates will solve that problem in any meaningful way.

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